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Egypt is South Korea’s main African investment destination with $600m financial flows: Ambassador - Daily News Egypt

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Egypt is South Korea’s main African investment destination with $600m financial flows: Ambassador

Two countries plan to initiate feasibility study on economic partnership agreement that will boost bilateral trade, investment


The year 2020 marks the 25th anniversary of the diplomatic relations between Egypt and South Korea. Every year on 15 August, South Korea celebrates its National Liberation Day, but due to the novel coronavirus (COVID-19) pandemic, the celebration was postponed to 22 November.

On the occasion, Daily News Egypt sat down for an interview with South Korea’s Ambassador to Egypt, Hong Jin-wook, to discuss all aspects of the bilateral relations between Egypt and South Korea. During the interview, Ambassador Hong touched on the ongoing peace process on the Korean Peninsula.

 

Daily News Egypt sat down for an interview with South Korea’s Ambassador to Egypt, Hong Jin-wook, to discuss all aspects of the bilateral relations between Egypt and South Korea.

What is your assessment of the Korean-Egyptian relations, particularly in the economic sector, and how can both countries benefit from each other?

Egypt is a strategically important partner for Korea. It not only has a very large domestic market, but is also a strategic base for Korean companies to enter Africa, the Middle East, and Europe.

Korea, which is a 3050 Club Member, is the only country that has converted from a beneficiary country to a donor country, and can contribute to Egypt’s economic growth through sharing experiences, transferring technologies and making joint investments. This is why Egypt’s President Abdel Fattah Al-Sisi visited Korea in 2016 and signed a Comprehensive Cooperative Partnership between the two nations.

The visit to Egypt scheduled by the Korean President Moon Jae-in, last March, was to take the opportunity of the 25th anniversary celebrations to chart with President Al-Sisi the course of development of our future relations. Although the visit was postponed due to the COVID-19 outbreak, both leaders exchanged their vision for cooperation in two lengthy tele-summits on 5 March and on 20 October this year. They agreed to combine their efforts to deepen the strategic partnership, and inject new impetus into the economic and trade relations. They also discussed how to promote existing cooperation in the fields of infrastructure, energy, health, and ICT.

Spurred by two top leaders’ efforts and eagerness to enhance the bilateral relations, the Korean Embassy in Cairo has been working hard on diverse cooperation projects, in cooperation with the Egyptian Ministry of Foreign Affairs and other relevant authorities. My team and I will do our best to keep the momentum going, so that the two countries will gain all fruitful achievements, with my President visiting Egypt in the near future.

 

How do you see Egypt’s economic development under the new reforms adopted by its government?

The Egyptian government has carried out bold and ambitious reforms that have been successful in achieving macroeconomic stabilisation and a recovery in growth. For that reason, the Egyptian economy has shown great resilience amid the COVID-19 crisis, maintaining a positive outlook by all financial and credit institutions. It was possible also thanks to the government’s proactive approach to control this pandemic, with measures that caused least disruption to business activities and kept the production wheel running.

I can see that this success, together with the government’s determination to continue its  reforms, gives more confidence to the Egyptian business community and also offers good prospects for Korean investors.

 

South Korea’s Ambassador to Egypt, Hong Jin-wook

Can you elaborate on the cooperation between the two countries to strengthen efforts against the COVID-19 pandemic?

There are several aspects to our coordination to combat the pandemic.

In terms of financial support, the Korean government provided $200,000 in cash, in May 2020, to fund emergency health response activities against the COVID-19 outbreak in Egypt, which was the first cash support from a development partner country to Egypt.

Korea has also supplied important medical equipment, such as CT scanners and oxygen tanks which can help detect and treat COVID-19, equivalent to another $200,000, to El-Salheya El-Gedida Central Hospital in Sharqeya governorate. In August 2020, an additional support of $500,000 worth medical supplies, such as test kits and medical face masks, followed.

Above all, Egypt and Korea, both containing the pandemic successfully so far, are expected to enlarge further cooperation in this area by sharing their successful experiences.

 

As a new Ambassador, what are the files you are giving high priority to? What are the cooperation files that need to be enhanced?

I am glad to witness existing vibrant cooperation between Korea and Egypt across various sectors. To name a few, Korea has been actively engaging with its Egyptian partners on a number of successful projects in transport, education, ICT, energy, waste management, and others.

My role as Ambassador is to be a good matchmaker, and to explore new areas for our collaboration as well as facilitate chances for successful cooperation between the right partners in existing and new cooperation areas. Currently, there are a number of projects in the pipeline in the health, science and technology, automotive, railways and defence industry sectors, among others.

However, I would like to put more emphasis on people-to-people exchanges, including and not limited, to tourism, culture, and education. This will contribute to forming more sustainable partnerships on the basis of solid trust and understanding between our people.

 

How do you assess the trade exchange between Egypt and Korea during the third quarter (Q3) of 2020? What are the expectations or targets by the end of 2020?

Although Egypt is our largest export partner in Africa, the trade volume is far below the two countries’ potentials. The average annual trade volume between Korea and Egypt during the last five years stands at $1.9bn, which grew slightly in 2018 to reach $2.16bn. Exports are mainly concentrated in oil derivatives, LCDs, cars and related parts, while imported items from Egypt include chemicals like ‘naphtha’, fertilisers and marble. Current pandemic crisis is at this moment preventing us from exploiting our trade collaboration potential. 

Considering Egypt’s large market and its expanded network through FTAs with various regions and countries, I believe it is the right time for Korea and Egypt to work together to connect Asia and Africa by trade and investment collaboration.

 

During the interview, Ambassador Hong touched on the ongoing peace process on the Korean Peninsula.

Egypt is reportedly one of the main destinations for Korean investments in Africa, is this true?

Indeed. Egypt is Korea’s main investment destination in Africa. We have very good examples of Korean investments in Egypt, such as Samsung Electronics in Beni Suef and LG Electronics in the10th of Ramadan city. These companies have made big investments in the local market and are exporting ‘Made in Egypt’ products to other countries in the Middle East and Africa at around $700m a year, contributing to more than 90% of Egyptian exports in electronics.

We want to replicate these success stories in many other areas and encourage more Korean investments to Egypt. This can also be done through facilitating trade. Once companies secure a certain market share by trade, they should begin considering expanding their presence also by making investments. This is why Egypt and Korea are planning to initiate a feasibility study on an economic partnership agreement that will boost bilateral trade and investment.

 

Could you elaborate on the volume of Korea’s foreign direct investment (FDI) in Egypt and in what sectors are those investments focused?

There are around 171 Korean companies in Egypt, 30 of whom are major companies working in various sectors, including electronics, textile, construction and services. These companies provide more than 4,500 job opportunities, and have plans to expand their current investments, which already exceed $600m.

We always prioritise investments in sectors vital to the lives of Egyptian citizens, and work to create a sustainable ecosystem for inclusive growth. For instance, through the Korea-Egypt technological college in Beni Suef, one of the most successful Korean ODA models, and the Samsung Electronics factory there, we link technical education with practical training and job opportunities. These serve the needs of industrial development in the Upper Egypt region, in line with the Egyptian government’s regional growth policy.

 

What are the main challenges that still prevent Korean companies and private sector entities from investing in Egypt? What are your recommendations to attract more Korean companies?

We are working closely with our partners in the Egyptian government to address any difficulties that Korean investors face. I would like to take this opportunity to thank the Egyptian government for their efforts to ease those difficulties and to provide a platform for an open dialogue with investors.

This not only helps Egyptian authorities to assess areas where additional progress is required, especially with regard to the relevant customs and tax procedures, land allocation, work permits and visa, export subsidies among others, but also allows the Embassy to identify Egyptian counterparts’ expectations for Korean investors. What is most important to attract more Korean companies, however, is to help those currently operating in Egypt make their success stories.

 

How many Korean tourists did Egypt receive during the first two months of 2020?

Visitor statistics for this year are currently not being verified. However, there were several chartered direct flights between Korea and Egypt during the last winter season. More than 3,000 Korean visitors are presumed to have visited Egypt during the first two months of this year and more fans of Egyptian cultural heritage and its nature are expected to come here after the pandemic.

 

When will Korea resume its flights to Egypt?

There are currently no regular direct flights from Korea to Egypt, but there are various transit routes, for example via Dubai and Ankara, through which Korean visitors continue to enter Egypt to see the wonderful nature and marvellous cultural heritages of the country. I am sure that will contribute to the resumption of direct flights between our two nations in the not too distant future.

 

What are the Embassy’s plans for the next few years?

My immediate priority is to promote high-level visits and launch a Ministerial joint economic committee, as they undoubtedly provide a big boost and momentum in our bilateral relations.

Based on my firm conviction that only mutually beneficial cooperation will lead to stronger and sustainable ties, I want to focus my efforts on helping existing Korean investments make their success stories and intensify substantial cooperation in areas such as education and training, health, transport, ICT, housing, defence industries and energy, to name a few. During my tenure, I would like to see our trade and investment relations become stronger, in order to reach their full potential.

I am also deeply committed to promoting Korean culture, both in terms of the traditional and modern pop culture, as a way of enhancing mutual understanding and encouraging more interactions between our two peoples. For that purpose, we opened the Korean Cultural Center in Cairo in 2014, which is the first in the MENA region.

 How do you see the peace process on the Korean Peninsula in the next few years?

 

The Korean government will continue its efforts to achieve complete denuclearisation, and the establishment of a permanent and solid peace regime on the Korean Peninsula. As a political declaration of ending the war as a starting point for peace negotiations, the Korean government will endeavour to conclude a peace agreement at the final stage of complete denuclearisation.

 

This will lay the groundwork for the peaceful reunification of the Korean Peninsula and promote peace and stability not only on the Korean Peninsula, but also in Northeast Asia and across the globe as well.

 

Culture is pivotal in strengthening ties between the two counties – what are your plans to enhance the cultural exchange between the two countries?

I think there is nothing like culture to naturally improve the closeness between peoples of our two countries. When the people of one country like the culture of another country and get used to it, they naturally come to have a positive image of that country.

That is why our embassy is making efforts to introduce Egyptian culture to the Korean people in a balanced manner rather, than unilaterally introducing Korean culture to the Egyptian people.

Last year, many young talented Egyptian people became the main characters at our embassy and produced a talk show called “Assalamu Alaikum”. The YouTube show introduces the cultures of the two countries, and has become a hot topic in both Korea and Egypt. We will also continue to expand programmes introducing the modern lifestyle of Egyptians to the Korean people and vice versa.

 

Education and human resources development are among the main areas of cooperation between the two countries, what are the fields of cooperation in this area? How can Egypt benefit from Korean expertise?

We support the sustainable development strategy or Vision 2030 of the Egyptian government. Our efforts are in line with the Egyptian government’s plan to make the common platform for national development with partner countries and institutions under the narrative of 3P (People, Project, and Purpose).

Currently we are specially focusing on the quality of vocational education in the form of higher educational institutions. The establishment of the Egyptian-Korean Technological University in Beni Suef is our latest effort. This will provide a considerable level of vocational education to the students so that they are equipped with the skills and knowledge that are immediately applicable when they gain jobs after the graduation.

 Enhancing the productivity of the public sector is also one of our main purposes. We hope that our Egyptian partners will have an interest in our approach to e-government collaboration, for effective and efficient government management. We are already cooperating with the Egyptian Patent Office and Egypt’s Ministry of Finance, to apply some of Korea’s e-government schemes.

Also, we are coordinating with the Ministry of Foreign Affairs to help Egyptian officials and experts from different backgrounds join various capacity building programmes in Korea every year. We will continuously work with our counterpart ministries to expand the opportunities of cooperation in human resources development.

 

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